Arun Jaitley seeks detailed review of defence PSUs

Concerned over the performance of defence public sector units (DPSUs), the defence minister, Arun Jaitely, has asked for a detailed review of these units.

Jaitely on Tuesday had said in Parliament that public sector undertakings should learn to function like private business houses in a competitive environment and should not be run like a government department.

NDA government has already indicated disinvestment of some sick public sector units. And partial disinvestment of the Bangalore-based Hindustan Aeronautics Limited (HAL) will happen soon, according to a top official.

Though the cabinet committee on economic affairs had approved divestment of 10 per cent equity in HAL in 2012 on the recommendation of an expert committee report, headed by the former cabinet secretary BK Chaturvedi, but it has yet not been finalised due to some technical glitches.

According to a top defence ministry official, the minister is seeking a status report of all pending projects, reason for their delays and the public sector units' dealings with the foreign companies. After announcement of an increase in FDI in defence, various foreign firms have expressed their will to join hands with the public sector units like HAL.

The ministerâ€™s demand came during a meeting with senior MOD officials in the post-budget meetings in the south block.

â€œIt an attempt to overhaul the government-run companies, who have been missing their deadlines repeatedly. The minister is very concerned about the delays of key defence projects handled by these public sector units,â€ an officer told dna.

Project Light Combat Aircraft Tejas has exposed performance of the PSU as it is yet to be completed after three decades of its launch.

Besides, the minister was keen to know the kind of tie-ups that Indian PSUs such as HAL have with various foreign companies and if they were going according to original plan.

Sources further claim the review has become important especially after a CBI probe into Rolls Royce bribery scandal to supply engines to HAL.

Official said that the defence production department will update Jaitely in detail about the tie ups, their progress etc.

Another official claim that the review is very preliminary and could be the ministerâ€™s effort to acquaint himself with the complex ministry.

There are no clear indications yet from the new government if it was planning any drastic measures in the defence sector, other than the recently announced hike in FDI.